The January Sales Managers Survey continues to reflect an economy still some way behind the growth story seen in the heady pre-Covid days. Economic activity in India is, little by little, recovering from the disaster of the global pandemic, but the scenario is very much one of two steps forward, one step back. January was a step-back month. All Indexes bar Prices, fell back from the optimistic levels achieved in December.
Business confidence remains strong in January
Business Confidence Index
Of particular note, the Business Confidence Index (highlighting confidence in the near future) surged to a 33 month high of 54.3 last month, reflecting a strong and widespread belief that economic growth is likely to increase significantly in the first quarter of 2023. In contrast, January saw a modest fall back from that position, but still reflects, with a January Index reading of 53.6, the powerful thread of optimism now prevalent in Indian business circles.
Nevertheless, the overall Sales Managers Index fell back into negative territory in January, propelled there by poor Index readings for the Staffing Levels Index (down to a very low 46.1); and the Sales Growth Index, down to a similarly lowly Index reading of 48.7.
Signs of the green shoots of recovery in economic activity are definitely present in the views expressed that make up the Business Confidence Index. But more tangible signs of recovery in sales and staffing levels may have to wait a few more months.
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